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Founder Richard Schulze won't back off from Best Buy takeover

Best Buy founder Richard Schulze said today he will not back off his efforts to buy the company.

Schulze again wrote the retailer's board to seek permission to examine the company's books as part of an effort to raise billions of dollars needed for a buyout. Schulze also says that under Minnesota corporate law he can't form a bidding group without the board's permission.

But Best Buy's board spokesman Bruce Hight said there's no such constraint on Schulze.

"Minnesota law does not prevent him from further exploring and engaging in discussions with his private equity partners, and he does not need the consent of Best Buy's Board of Directors to bring forward a proposal that names them," Hight said.

But legal experts say Minnesota law is quite strict about takeover offers.

Ohio State University takeover law expert Steven Davidoff, an Ohio State University law professor who writes the DealBook column for The New York Times, said Schulze can talk to potential partners, but must stop short of forming an investment partnership.

"If you look at the statement from Best Buy, he's certainly free to talk to them. He's not free to form a group," Davidoff said. "He could talk about the possibility of making a bid. But once they enter beyond preliminary stages, he's going to have to come back to the board and seek their approval."

The law gives Best Buy's board great leeway in deciding whether to reject Schulze's takeover proposal. Without that approval, the board could force Schulze into a multi-year wait to pursue a hostile takeover.